Rupee Plummets 43 Paise to Settle at All-time Low of 76.87 Against US Dollar

Business

The rupee tanked 43 paise to settle at an all-time low of 76.87 against the US dollar on Thursday, amid rising concerns over a coronavirus-led economic slowdown.

Forex traders said the weakness in the rupee was largely due to strengthening of the US Dollar against a basket of currencies as investors fled to safe-haven greenback amid weakening risk appetite in the markets.

At the interbank foreign exchange, the rupee opened weak at 76.75, and during the day lost further ground to settle at 76.87, registering a fall of 43 paise over its previous close.

During the session, the rupee moved between 76.68 and a low of 76.87 against the US dollar.

On Wednesday, the rupee had settled at 76.44 against the greenback.

Besides, investor sentiments remain fragile amid concerns over the impact of coronavirus outbreak on the domestic as well as the global economy.

The number of cases around the world linked to the new coronavirus has crossed over 20 lakh. In India, over 12,000 coronavirus cases have been reported so far.

Brent crude futures, the global oil benchmark, rose 1.17 per cent to USD 28.18 per barrel.

Foreign institutional investors (FIIs) were net buyers in the capital markets, as they bought shares worth Rs 1,358.66 crore on Wednesday, as per provisional data.

Domestic stocks advanced with benchmark index BSE Sensex closing 222.80 points or 0.73 per cent higher at 30,602.61. The NSE Nifty climbed 67.50 points, or 0.76 per cent, to finish at 8,992.80.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose by 0.29 per cent to 99.75.

Forex traders said the rupee fell to record low level amid a stronger dollar and sluggish economic activity.

“Indian rupee closed near-record low of 76.87 a dollar. Export slumped by a record 35 per cent in March and sluggish domestic economic activities put pressure on the currency,” said Devarsh Vakil- Head Advisory, HDFC Securities.

Vakil further said, “The rupee has come under pressure as foreigners sold USD 6.4 billion of stocks this year and USD 10.5 billion of rupee bonds amid global risk-off triggered by coronavirus pandemic”.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 76.2743 and for rupee/euro at 83.6012. The reference rate for rupee/British pound was fixed at 95.9754 and for rupee/100 Japanese yen at 71.23.

“Rupee fell for the second successive session as the dollar strengthened against its major crosses. On the domestic front, market participants are waiting for more clarity on the stimulus package that could be announced by the Finance Minister,” said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.

“A decline in crude oil prices supported the local unit to some extent, as record production cut agreement by OPEC+ still looks insufficient to rebalance the oil market. Alongside, the coronavirus pandemic is keeping investors on the edge and that is likely to steer the domestic currency on an unhindered path towards 77.50 mark in coming days,” Sugandha Sachdeva, VP-Metals, Energy & Currency Research, Religare Broking said.